# Budget & Finance Committee Meeting - October 28, 2008 > Auto-transcribed civic record · October 28, 2008 - **Permalink**: https://meetings.lexingtonky.news/meeting/663 - **Source video**: https://lfucg.granicus.com/player/clip/663?view_id=14&redirect=true - **Date**: 2008-10-28 - **Last revised**: July 17, 2026 - **Length**: 16,751 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed with OpenAI's open-source Whisper large-v3-turbo model, run locally by The Lexington Times. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude. Verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Urban County Council - Budget & Finance Committee met on November 25, 2008, at 1:00 p.m. in the Urban County Council Chambers, with Dr. Stevens presiding. The committee addressed three agenda items during the session, hearing two informational presentations and deferring one matter for future consideration. Five members of the public provided comments during the meeting. No votes were taken during this session. ## Attendance The following individuals were present at the meeting on October 28, 2008: * Dr. Stevens * Linda Gorton * Chuck Ellinger * Jay McCord * Ed Lane * Kevin Stinnett * George Myers * Andrea James * Don Blevins No absences or late arrivals were recorded. ## Public Comment The meeting included comments from council members and program representatives addressing agricultural preservation, economic development, and community engagement. **PDR Program and Funding** Mr. Billy Van Pelt provided a detailed update on the Purchase of Development Rights (PDR) program [timestamp: 0:53:09], discussing funding levels, acreage protected, and application trends. He emphasized the program's cost-effectiveness and its role in preserving Fayette County's agricultural identity. Council Member Jay McCord [timestamp: 1:00:09] addressed the PDR program during challenging economic times, advocating for creative funding approaches and suggesting a focus on donations. He also proposed a strategic meeting with Commerce Lexington, UK, and state legislators to address sales tax inequities affecting horse farms. **Economic Impact and Industry Data** Dr. Allison Davis presented economic data on the equine industry in Fayette County [timestamp: 1:19:00], including employment figures, value-added contributions, and multiplier effects. Her presentation highlighted the industry's significant contribution to local wealth creation and job generation. **Community Engagement and Branding** Council Member Andrea James [timestamp: 1:36:30] urged the committee to develop public education efforts connecting urban residents to the equine industry. She recommended highlighting historical ties, including the legacy of African-American horse trainers and the story of Big Lex. Council Member Linda Gorton [timestamp: 1:45:58] proposed branding initiatives using "Big Lex" on wayfinding signs, bus shelters, and city materials. She also recommended evaluating the PDR program's long-term goals and potential to ensure alignment with the community's vision. ## Equine Task Force Study: Economic Impact and Recommendations [timestamp: 00:03:04] The committee reviewed findings from the Equine Task Force, which examined the economic significance of the equine industry in Fayette County. The presentation was informational in nature and featured multiple speakers with expertise in different aspects of the equine sector. **Key Speakers and Topics** The following speakers presented findings: - Dr. Stewart Brown - Dr. Duncan Peters - Dr. Nancy Cox - Dr. Lori Garkovich - Dr. Allison Davis **Presentation Focus Areas** The presentations covered three main areas: - Veterinary services within the equine industry - Economic clusters related to equine activity - The University of Kentucky's role in supporting the equine industry **Outcome** The agenda item concluded as an informational presentation, with no formal action or recommendations requiring a vote at this time. ## PDR Program Update Billy Van Pelt provided a comprehensive update on the Purchase of Development Rights (PDR) program [timestamp: 00:53:09]. The presentation covered the program's funding status, acreage protected, application trends, and long-term goals. **Key Topics Presented** The update highlighted the PDR program's success in preserving farmland and supporting the equine industry. Van Pelt discussed current funding levels and the total acreage that has been protected through the program to date. The presentation also included information on application trends, indicating the level of interest and participation from landowners seeking to preserve their properties. **Speakers** Billy Van Pelt led the presentation, with Tom Thornberry also participating in the discussion. **Outcome** This agenda item was informational in nature, providing the board or committee with current data and progress on the PDR program's operations and achievements. ## Equine Industry Economic Development Priorities The committee discussed key priorities for advancing the equine industry during this agenda item [timestamp: 1:39:46]. Dr. Stevens and Bob Quick led the discussion on strategies to support economic development within the sector. The committee identified several core priorities for the equine industry: * Establishing a dedicated economic development role to coordinate industry advancement efforts * Nurturing the equine cluster to strengthen interconnected businesses and services * Developing a unified public policy position in coordination with state partners The discussion focused on how these initiatives could work together to create a more cohesive approach to equine industry growth and support. **Outcome** The committee deferred action on this agenda item, indicating that further discussion, information gathering, or deliberation will be needed before making decisions or commitments regarding these economic development priorities. --- ## Full transcript I will call the meeting of the budget and finance committee to order. We have a new clock here in the chamber and nobody knows whether it's right or not, but I think it's close. It says 1235, I think, but that only makes it 30 minutes off. Some people would say that the council is usually that far off the mark anyhow. But today our purpose in this meeting is to carry on the work of John Gaines. And John Gaines approached me several years ago to renew an idea that he had that was maybe brought forth 10 years before that. And that was that the stallion standing in Lexington is what made us the horse capital of the world. and that we should take whatever measures as a community were necessary to amplify their opportunities and to make sure that that nucleus of the best genes in the thoroughbred business stayed here in central Kentucky. His idea didn't get adopted by the government, at least at that time, but he kept working on me. And so finally, I introduced and the council passed a resolution to appoint a task force to review this situation and to study the various parameters in the business and to report back. That was done. Frank Penn and Bob Quick chaired the task force. And we met, I guess, for Ed Lane and I were on that, representing the council. Many others were there. And we met for about 18 months. And then a report and final recommendations were prepared. And Bob had the chance to present that to the council a little while back. the council now has a rule that all presentations are limited to 15 minutes which in this case was not long enough so we decided to have this meeting today where we can amplify on what was presented and share with the council other information and then at the end we can go over those items that we might want to direct our attention to as far as implementing what needs to be done or could be done. Is there any questions from the council or anything anybody wants to say? If not, I'll call on Dr. Stuart Brown, doctor of veterinary medicine, who will tell us about the hospitals we have here and veterinary practices that deal with horses and what their import or influence on our community might be. Dr. Brown, thank you. Thank you, Dr. Stevens, and thank you all for inviting us to come and participate in your committee hearing. Just as a form of a little bit of background on why I come to stand before you a little bit, I am truly a hard boot from this region. I was foaled and raised in Woodford County. Having grown up and spent a lot of my childhood years working in the thoroughbred industry, I began my first active job in this industry when I was 13 years old and have been participant at some level in the thoroughbred industry in central Kentucky since that time. I always had the aspiration of becoming a veterinarian and equine practitioner in particular here and sort of in truly living the dream from that perspective. I spend my day going out and about to attend to a number of my clients in the central Kentucky area in a referral setting to address the needs of about 650 or so thoroughbred broodmares that I take care of in this region, along with their foals, yearlings, and also some stallions. And so I want to thank you for the opportunity to come to speak to you today as a representative of Hager Davidson McGee, but also as a representative of the veterinary profession. I hold a number of and have held some positions here in the past. I'm currently the immediate past president of the Kentucky Veterinary Medical Association, and I represent that body as a member of the Kentucky Association of Equine Practitioners, which is a constituent organization from the Lexington locale area, this five-county region of about 170 to 200 equine veterinarians that service the population of about 21,000 to 25,000 thoroughbred mayors and mayors that live in this area that give rise to the core level of business that exists here. We obviously are here as a support group due to the fact that these mayors reside in this area along with about 300 or so plus stands that give the basis for the thoroughbred industry as it exists here. as they go, so do a lot of the other satellite industries that support them, much like Toyota is supported by windshield companies and other things that are satellite industries in this region. The veterinary industry exists here to support and care for these commodities that exist within our confines, because one of the truly great, valuable things that I've learned about over my lifetime here is that we have these great soils and these great factories with which this thoroughbred nursery gives rise to support this industry. I forget to add, too, that as a part of my own personal interest, I serve on the board of directors of the Kentucky Thoroughbred Association, and my wife and I actually own a farm, and we raise some of our own thoroughbred horses. So I'm kind of an all-in kind of guy. I'm there at all levels. But certainly now, I certainly hold role at Hager-Davidson-McGee as a president of that organization. We are 132 years old. We're the second oldest business in Lexington behind Millward's Mortuary. Everybody asked that question, so I figured I'd better throw that in. If you want to know where we are, we have a 93-acre campus. We're located directly across from the Kentucky Horse Park off of of Ironworks, a very good location certainly with which to take care of patients and to act as a referral hospital. We're close to major thoroughfares. We're easily accessible to most of the clientele that we would have that's come from this area and as well as other groups and other breeds outside the thoroughbred industry. So this has obviously been a great location for us. When people ask about veterinarians, you know, we are the largest private equine veterinary practice in the world. We have about 64 equine practitioners currently that work within our practice. They're made up of, just as veterinary medicine has followed a lot of the trends that we see in human medicine, where we have many areas of specialty practices and certifications that exist. We have 12 board certification practitioners in our hospital, eight women and four men. Two of those are part of the American College of Theriogenologists, so they're reproductive specialists. six that are from the American College of Veterinary Internal Medicine, one from the College of Veterinary Emergency and Critical Care, and three from the American College of Veterinary Surgeons. We are kind of viewed as and represent ourselves to our clients as like the Mayo Clinic of equine veterinary practice. We try to provide all things to all people in terms of expertise and talent with which to address veterinary issues that our clients face in order to service whatever their needs are. Thus, we have specialty areas that have developed out of need-based approaches for servicing our clientele. We also have a large support staff. There are almost 199 doctor employees that exist now currently at Hager-Davidson-McGee. Obviously, those folks generate a large payroll of close to $5.4 million. Obviously, it takes lots of people to take care of lots of horses. And we, with a large clinical hospital like we have that has various divisions, takes them lots and lots of people to run those facilities. So we are a large employer in this area. We also have many vendors, many people with which we work. We have about 213 vendors that existed in 2007, and we spent almost $16.1 million with those vendors, give or take. We have a lot of people on the road. We have a lot of vehicles. There are 36 field service vehicles. They traveled 1.7, roughly, million miles last year and used over 140,000 gallons of fuel, 563 oil changes, and 168 tires. So we buy a lot of things to kind of keep this engine running. We do lots of different things as we go out and carry out the needs of our clientele in the central Kentucky region. Construction projects are something that, as I stated before, have been a part of our vision for what we do to service the clientele in this region. And it becomes an ever-expanding horizon for us with which to address the needs of our clientele. Obviously, as they become more sophisticated and we have greater needs, we tend to address those. We just recently completed a $4 million expansion, which housed new surgical facilities with which to take care of emergency cases in our area. It also includes one of the largest MRI units available for horses in the United States. It's the largest magnet on the East Coast at 1.6 Tesla. So it's been a big, big part of our practice investment here in recent years. And so this $4 million expansion is another component that we have added to our repertoire for servicing clients in the area. Just this November, we will have groundbreaking for a new Haggard-Davidson-McGee sport horse facility that will exist across from the horse park on an adjacent property that we also own. If we talk about what is truly our business footprint, though, in this area, The thoroughbred industry is one of our largest and certainly most historical footprints that we have in this area. Doctors Haggard, Davidson, and McGee were extremely well-known through the 40s, 50s, and 60s with tremendous nursing care, cutting-edge veterinary medicine, all the things that are beyond the scope of this conversation to discuss in terms of the contributions they've made to the advancements in equine veterinary medicine. And we exist as stewards to carry on that tradition with the horsemen of central Kentucky. We have 36 veterinarians primarily that do the work on the Central Kentucky horse farm areas. Within the hospital, we have 25 veterinarians. We do over 6,000 surgeries a year in our facility and have approximately a little over 2,500 patients in our internal medicine facility. So you can see we're a very busy place. We have a lot of traffic, a lot of things that go on there, and we obviously address a lot of the needs for our clients in this area. We also participate a lot in the thoroughbred sales arena. I am particularly fairly involved with a lot of the sales at Keeneland and Fasig-Tipton, but we have certainly a force of people that go and travel to aid in the commerce that occurs in the area. We also travel to Florida, New York, and Maryland, but we have a large force, obviously, here in Kentucky. We also have started a venture about three or four years ago. you'll hear a little bit more about from my colleague Dr. Duncan Peters and the Haggard Sport Horse team. In Kentucky, we have a presence year-round with our close proximity to the horse park and with the emerging area within the sport horse industry that occurs in the central Kentucky region. We have seen fit to have an investment in this area. We also travel to Wellington, Florida for the jumper horse season for four weeks in the winter. We also go to Thermal in California where we have a presence for approximately 12 weeks and to Traverse City, Michigan, where we are also present for three weeks. And it somewhat follows a circuit not unlike the thoroughbred racing circuit in terms of taking care of this clientele, many of who are based as residents or citizens in this area. We also established a full-service retail pharmacy at Hager, Davidson, McGee. We were the first licensed veterinary pharmacy in the state. It is a wholesale pharmacy that is used by licensed veterinarians for their supply of pharmaceuticals. We also take care of clients of those licensed practitioners in this area. And we are licensed in or legal to ship to 40 states in the continental U.S. So we have a lot of people from outside the state of Kentucky that come to us due to our reputation, our name for servicing clientele beyond the scope of just the bounds of central Kentucky. I put this question in here, it's just, you know, in terms of addressing the topics that you talked about today, but why doesn't the horse industry have the power we deserve? In a lot of ways, as we address a lot of the needs of our clients, we recognize that, you know, the industry kind of in a lot of ways has a lower visibility, and that's somewhat unusual for us here because it's a part of our culture. You find very few places other than Central Kentucky that have such a deep and rich equine culture as we have here. Many times, though, it's the interest that a lot of our clients have are perceived as a hobby and not a business. But they're truly a business. I mean, the type of clientele that I take care of are many, many people who are in this industry servicing clients that are actually F&T owners, that they board mares for, that they raise horses for. And these businesses give rise to the income that they have for, you know, raising their children, putting their kids in school, you know, investment in other industries within the state. So it's truly not been valued, I think, as well as it should be in terms of the business acumen that it offers to the region. And many times we're seen a little bit as fragmented because we have so many different groups that speak for so many different folks when they come to the table, and many times our message is somewhat mixed. And so having said all that, it's a little unusual for us from the standpoint of the visibility standpoint when we think about here because we hear so much about it and we have such wonderful partners in the area within which our communities work and services through. With that having been said, that's just a very brief overview of an example of one of the equine hospitals that is within Fayette County. Obviously, I can really only speak to this one personally, but as I stated previously, I'm one of approximately 200 equine practitioners that's here. So to give you some background or a platform with which to consider the impact that this industry has on the veterinary community. Thank you. Thank you. Are there any questions from members of the council? Councilman Beard. You mentioned 21,000 to 25,000 broodmares. What about the pleasure horses, hunter-jumpers, quarter horses, and on and on, standard breeds? That's right. Is that included in that number? No, sir. That was primarily the thoroughbred industry number, you know, for jockey club records for the number of mayors. As I say, historically, we've given rise for this business and the length of time that it's here that's had its roots in service in the thoroughbred community. But by our investment as well in the sport horse community as well as others, we've always – I guess when I first joined Hager, Davidson, McGee as a veterinarian in 1991, we had a preponderance of about 30% of our work would have been standard bred. Much of that industry has moved from here as stallions have moved away into the New Jersey region and that part of the northeastern U.S., and as such, we've seen a lot of the standard bred population move away as well. Again, it speaks to the importance of why we need to maintain the vitality of the gene pool of wonderful stallions that exist here that are the attraction for the industry and the thoroughbred side. But we also do a lot of pleasure work. Dr. Peters will actually address more of that component, I think, in his presentation of the group of folks that he services and his team does in light of additional things that we have not been traditionally considered as caregivers for. So the number would be significantly higher. Yes, absolutely. Thank you. Thank you. Thank you. Are there other questions? If not, we'll call on Dr. Duncan Peters, who will tell us about that sport horse. I just recently have an investment in a few thoroughbreds, and the trainer called yesterday and said one of them, whose name is Bounce Check, we had to take off the track and sell us a polo pony. So it just went from the first speaker to the second speaker. There you go. That's exactly what we're seeing, I think, in the area to some degree. I have recently joined Haggard Equine Medical Institute in part of this need to address a different area and a different economic aspect of the horse industry that's now tending to grow here in the Lexington area and around this region. I came in in 2006 right around Rolex time. That's always a good framework. Everyone knows what Rolex is, been here, and has grown since 1978 into a major international competition and one of the best in the world, and highlights some of the sport horse possibilities here in Lexington and in the area. We have a team basically at Haggard that is composed of right now two full-time people involved in the sport horse area. and between four and six part-time people, depending on the time of year and the other responsibilities with some of the farm work. But what are these sport horses? Well, basically for us it falls into anything that is not racing, and it becomes a pleasure horse that is doing trail riding all the way up to international competition horses involved in any of these sports you see up here. from polo, as you mentioned, Dr. Stevens, to Rolex, to international jumping, and the Western disciplines also. Why are people involved in sport horses? I think this is important for us to look at from my point of view, but also for an understanding. These horses have become, from this survey recently done in 2007, that in a great degree, this is a hobby to people. It's an enjoyment. It's an avocation. But they also involve the aspects of competition. There's this self-assessment sort of format, how am I doing in terms of working in another environment. The companionship. A lot of these sport horses become companion animals to the people that are involved in them. and then we get into peer activities, family activities. And in terms of importance, a lot of these horses were not an investment horse, which is different than what we see in the thoroughbred industry to a great degree. These people stay with these horses for a period of time. There is some investment that goes along, and there's a lot of economic importance that is involved here and income that is involved with maintaining these horses over a period of time and getting enjoyment out of that investment into them. But marketing the horse falls way down on the list, and so these are companion horses that people enjoy doing things with. There was a survey that most of you are probably well aware of in terms of the economic importance of the horse. This was the American Horse Council survey. but the total impact looking at the country. But if you look down this list, recreational and showing horses are well above what we see in the racing industry. And Lexington has a reputation for horse capital of the world, and that's primarily racing. But the sport horses, the show horses are moving up that list in terms of Lexington a place to be. If we look at total numbers of horses, again, racing total numbers of horses is below what we see in recreational and showing. And then if we look at specific breeds, there are more quarter horses and certainly other breeds out there than the racehorses. That doesn't mean that the racehorses have been the focus of this area, but certainly the sport horses are coming in this direction. And I'm just going to pull up some examples from the short time that I've been here and the growth of our program at Haggard Equine Medical. When I started here, we were barely a footnote on the balance sheet. Last year, we were in 2007, we were 3% of the business. So in a year and 18 months, we were 3% of the business at Haggard from an economic standpoint. This year, our growth from this time last year to now is 23% within our facet of the sport horse, and we've now moved up from 3% to 4%. So we are moving, and sport horses are moving in this area. Certainly everyone knows the Kentucky Horse Park and the influence at the World Games coming here, first time in the U.S., is going to have a huge impact, And it's going to be a center. But besides that, people have already known that Lexington is a place to come and have competitions, and they enjoy it. And I'm out there in the trenches on a day-to-day basis at those competitions, as well as local farms that house horses around here. And there are great accolades to the existence of that park here and what it brings forward. As an example here, these are just some places that I've been involved with. Brass Lantern Farm, people moved here from Tennessee to come, and they're now renting out their farm. It's a 20-acre place. They're renting it out during the summer months to people that are coming into the area. It's a facility that allows them to board horses and to have a specific training area for the horses that are going to be primarily competing at the horse park. Place Bogs Hill Farm, also right here on Iron Works in Fayette County. They've actually moved their operation from Connecticut down to this region, and they usually have between 40 and 60 horses on 25 acres. and they moved down here because of the proximity to the horse park where they can show in one area for 14 weeks out of the year. They moved out of here November 1st to go to Florida where the weather's a little nicer and they'll show there until the middle of March and they'll be back. So they have a half-year operation in both places. Morgan Place called Playmore Farm are based here, compete all over the country. They have actually very few competitions directly here in this area, but the nice thing that they like is the ability to move north, south, east, and west with the transportation hub, as well as the great services that are here. Cloud9 Farm, a smaller operation, houses between 10 and 15 individual training horses, and this person came from California and basically came here sort of on the shirt tails of racing and ended up starting a little program here that has actually prospered over, they've been here three years. Up at the top, a gentleman, Ivan Rakowski and a gal, Paige Rassis. They actually have places in Florida. They come up here for the summer and rent places, small operations. Ivan Rakowski has horses that he buys and sells, trains, buys and sells, and Paige has her own horses. But they come up and lease little places that are available that they can do their operation out of, as well as show in this area and show up in the Midwest and be able to show in that region. Quarter horse guy here, Reining, has come to this area primarily because of the incentives with the quarter horse business and a number of his friends. He has between 25 and 30 horses in training, and these are also individual clients that he supports. Split Rock Farm, a gentleman, 24 years old, just purchased 10 acres and has put in a small operation that actually is in Scott County, but close again to the proximity of the horse park where he can compete there, and he moves his buy-sell operation and lesson program down south during the winter. Another place, Soltis Farm. This is actually a gentleman that's a veterinarian, moved here 50 acres in Fayette County, but his daughter shows horses, and he bought an additional farm for her on about 14 acres, and this is their base of operation, and they do most of their showing here but travel around. Scott Keller, another gentleman that came down from New York area, has set up a private little training facility with individual clients from the area, again, bringing business and coming in. A gal, this next one, just came through the area, passing through, headed to Pennsylvania. She got to Pennsylvania, stayed one week, and said, I'm turning around, going back to Kentucky. And she set up a little operation of a lesson program, which will allow adults and children to sort of build from the grassroots area of things. Spy Coast Sweet Oak, this is an operation that just bought 300 acres. and they're moving their entire breeding facility of sport horses here but have a very active competition group of horses that travels all over the country and internationally and they've again focused in this area because of access and facilities. And then just a comment here, I was standing by the arena at the end of this year sort of as the show season started to come to an end And this trainer, Jimmy Toronto, was standing there talking to a friend, and he said, Boy, I hope I didn't miss out. I haven't repositioned myself here, but this is going to be one of the greatest places to show in the world here pretty soon after the World Games. So talking about the Kentucky Horse Park. So I think that's a little bit of the mentality that's out there. What are these people looking for? Well, if you look at them, they are not huge operations. And certainly Fayette County has some land use restrictions, but a lot of the sport horse people do not need 100 acres or 300 acres or 1,500 acres. They do a lot of what they do on very small parcels of land that are very compact, complete, and allow them to operate in a small area. They need facilities to compete or participate in, and this involves things like the Kentucky Horse Park or other areas around here that have competition areas, as well as people that have the ability to get out and just ride their horses out in some land use areas. They want options for their horses, and that, again, the ability to do different things. They don't want to be keyholed into one area. They like metropolitan amenities that are easily accessible. and give them access to cultural items as well as conveniences, easy transportation around the area, as well as a hub to move out of the area where other competitions are. They definitely require quality services and a little bit of this recognition for the type of activity they're involved in. So that's pretty much what they're looking for in the future. Any questions? Thank you, Dr. Peters. Yes, I did have a question. You said that some quarter horse people had moved to Kentucky because of the incentives. What are those incentives for the quarter horses? Basically, it's based on a point system. Then this involves a lot of performance horses. And this incentive system was set up as a dollar system for them, depending on the number of points they could earn. And when it initially started out, it was $2,800 a point. And a point means you would obtain a point for winning a class or a competition, and then based on the number of horses in that, you would receive points. And if there were, I think it was between five and eight horses was the cutoff. So if you had ten horses in the class, you could earn two points for that class. And as they accumulated points during the year, they actually received an incentive for that. And basically it was a cashback type program. And that also included breeding. And so we've had horses come into the state just to be bred here and for foaling here also. And where does the money come from? It comes from the Quarter Horse Association. So their group raises the money. It actually, the funds for the Kentucky Quarter Horse Association Breeders Incentive Fund actually come from out of the proceeds for thoroughbred stand sales tax revenue. They actually get a percentage of those dollars out of the non-raising revenues for which to base the program for Kentucky-bred quarter horses. And so the point system is sanctioned through AQHA, the American Quarter Horse Association, but awarded through the state program. Okay, thank you very much. And are there any other questions for Dr. Peters? Yes. Mr. Blevins has a question for you. My question is for either one of our veterinarian guests. I wonder, do you think our lack of a veterinary college that can award degrees in Kentucky is a hindrance to our ability to deliver services, or are we okay still shopping out to Auburn and Ohio State? If you're not a native, you may not know what I'm talking about. No, I know exactly. I'll give you. Yeah, I don't feel that's a problem. I think we have, at least within our practice, we try to get the best of the best from all over. And some of those end up coming from Kentucky and have gone somewhere else to school. But, no, I don't think specifically that we lack because of that. I think we've got tremendous diagnostic capabilities as well as supportive care for the veterinary industry here with UK and some of those. Let me be clear. I'm speaking about not just delivery of services, but economic development. That's the reason we're here today, it sounds like. Would you please come to the microphone because the folks at home won't be able to hear you. With respect to the economic development piece, currently serving as the president of the KVMA, I've worked a lot with in the legislature about the issues related to the state not having a veterinary school. From the equine industry's perspective, that's probably not as big a requirement. and we have such sophisticated hospitals like ourselves, Rood and Riddle, the Woodford Vet Clinic, and whatnot within the population of veterinarians here that service the needs of the area. And we work strongly in conjunction with some of the services that the University of Kentucky has, such as the Livestock Disease Diagnostic Center, which has a tremendous staff of people that serve to support the veterinarians in the region as their true stakeholders. We also work within the Gluck Equine Facility, facility which is a tremendous research foundation that was built by Maxwell Gluck to work within addressing a number of the needs within the equine industry itself. We enjoy a very special relationship that's not present across a lot of places in the United States with our contract through the Southern Region Educational Board. We actually have contracts with two schools. It's Auburn and Tuskegee. I'm a graduate of Tuskegee. We no longer have a contract from Ohio State. It was diminished in 1979. So we do those two schools. We just recently enhanced the programs there where we actually send 10 more students. We were granted through the last legislature the ability to enhance our presence to serve the needs of the citizens of the Commonwealth. And what's the total now? The total now is 46. Right, so that's 46 students a year go to veterinary school from the entire state. That's correct. The likely, within their own state of Alabama, they only have 48 students that participate from their state for the Auburn school. So we've almost got the similar complement now to what a state-owned institution. We did the feasibility studies two years ago with the state and worked with the universities across the state about the possibility for building a veterinary school, for increased economic development. You'd be looking at roughly $500 to $600 million just to establish a new school. With the shortage of faculty that's now available across the United States, it may be very difficult to do within that. And then most of those schools have anywhere from a $40 to $60 million budget annually. So with the difficulties we face with the economic times, the federal dollars that have now been granted through the Farm Bill for bricks and mortars have been to expand the existing programs across the United States to address the needs of the United States in general. Auburn, Tuskegee, many of the other schools will take full benefit of those programs to enhance their class sizes, which is why we were actually asked preferentially if we would like to send more students. Our students are very well thought of at both of those schools as highly regarded graduates. Right. Well, I'm pleased to hear that it's being progressed. I was one of those students potentially back in about the time frame you were talking about. We won't have to be specific. and elected to go a different route in my career because it was so difficult to get in. Very competitive. I may regret it today, but that's one of the reasons I asked. Thanks. Yes, sir. Thank you both. Jay McCord has a question for one of you. For both of you. You can both comment on it. I tend to be the guy that goes to 30,000 feet fairly quickly and trying to look three to five years ahead and so forth. Can you tell me just in your all's industry, where are we going? What are the new opportunities for folks with degrees? Where do we have room to maybe grow outside of just as a service provider, as a doctor? And where I'm going with this is, obviously, our economy in Fayette County, right, this moment is based on a payroll tax. And having high-paying jobs here that don't take up a lot of bluegrass is a very sought-after thing. And I see that we have a lot of brainpower in these types of jobs. Is there an emerging field inside Ural's field that we can look to explore, that we can look to aid and benefit over the next three to five years? I think that in terms of economic impact, and you look at the slide that I presented, and I'll make this general comment, and then Dr. Peters may have some additional. But I think that you look at the payroll tax that we pay, the number of people that we service, the expansion that we've done in investment within this area, And we certainly see the importance of maintaining a vital horse industry to this region in order to add more veterinarians, to add more services, and to do more commerce here. We certainly have not been in a downward growth mode in my industry. We actually diversify, we specialize, and then we hire to address a number of these needs. We also find the need that as people find within my industry, I'm probably on the cusp of this in-between generation of being the road warrior mentality. I still, you know, work seven days a week and take care of my clients 24 hours a day, about 350 days out of the year. But that's the way that I serve as clients. Most people today coming out of school actually look for specialty careers, look to apply themselves in different manners and stuff. And so we hire more people to do the same and more work that we acquire. So from that perspective, I think we're in a growth-related industry, but we're very dependent upon the vitality of the industries as they exist here and the investment that gets made by the horse owners. Dr. Peters, would you like to? Thank you very much. Oh, Dr. Peters. Yeah, I think a specific area that is the technical aspects of veterinary medicine. We are in a high-tech time, and the information explosion just keeps going. And so I think in terms of the assistance that we in the industry probably are looking at is a lot of this high-tech abilities. I'm older also, and I still have trouble with my BlackBerry as to what keys to press and everything else and need to go to someone to get that help. And I think, you know, we are very technical-oriented in veterinary medicine now, and it's just growing and growing and faster and faster than we can keep up. So I think in terms of personnel and manpower, we need more educated folks to help with those aspects. So just so we've kind of been clear on this, you know, one of the things that we talk a lot about up here is where do we focus our energies and our resources, how do we work with our partners like Commerce Lexington and other places, and that while we're sending folks to Auburn and to Tuskegee and so forth for these types of skills and they're coming back and we're doing okay there, What I hear you saying is that there is tremendous opportunity to grow more technical support for you, and we can look at industries inside of that and jobs inside of that that would also help you tremendously grow your business as people more specialized and we need more people to keep you off the road or people are not being grown like yourself. So I just want to kind of glean some of this stuff out because in a presentation this long, you can't lose that, And this is an area of focus where we can look to what are we doing with UK right now, what are we doing with our other colleges to help you. So I appreciate you pointing that out. Thank you all. Our next speaker will help us with what UK is doing. Dr. Nancy Cox from the College of Agriculture will tell us about UK. Thanks, Chairman Stevens and members of the committee. I'm going to briefly highlight, that's actually not my presentation, but I don't have one. I'm going to briefly highlight the UK Equine Initiative. Some of those features that I'll highlight were presented in the earlier task force report. The UK Equine Initiative is what we call a recommitment of Kentucky's land-grant university to our signature industry in the state. We've engaged in a planning process aggressively since 2005 that has purposely engaged our stakeholders from all breeds and all segments of the industry. The LFUCG Equine Task Force studied the potential of UK to contribute to economic development. And to follow up on the discussions on veterinary medicine we've just had, we would argue that together with our two premier clinics and many other veterinarians, veterinarians, as well as the Gluck Equine Research Center and the Livestock Disease Diagnostic Center, who have over 20 veterinarians, that Lexington is also the horse health capital of the world, not only the horse capital of the world. We have also a new reproduction initiative. Dr. Brown referred to the thoroughbred nursery. This is the most concentrated area of horse breeding in the world, and we have a new reproduction initiative in the Gluck Center that intends to interface appropriately with the industry. We also have a new undergraduate program aimed at developing an appropriate workforce for the industry. This is a new program only in its second year in the U.K. called Equine Science and Management. We also are developing the Main Chance Farm as a cultural amenity and an excellent place to train our students. You'll notice that we've used our road money from the Newtown Pike expansion on our side of the road to build new fences, stone fences, and four-plank fences and some new arms. We also consider Maine Chance Pharma a cultural amenity to the extent that we will be hosting part of the bike trail on the western side of that farm. I'd like to comment also to follow up on the potential for economic development that we believe UK can partner on with this community. The Division of Commercialization and Innovation, headed by Deborah Clayton, had a consultancy study last year, and they identified animal health research and development as a growth area for the state, building on the expertise of the university and the clinics and other pharmaceutical companies that are already present in Lexington. We would like to develop that further into an animal health corridor that included research and development. While we don't have a veterinary school, we do have a lot of R&D, and we could do more. Also, with our unique specialization with horses that we have at the Diagnostic Center, we have the largest caseload for horses in the world, we can train other people's veterinary students either during their veterinary degree or after they've completed their degree in the research arena. So we believe we have some potential for that. We've talked about it with the 2040 team, and I believe it will be discussed further. We've also discussed the hosting by UK or partnership by UK of the equine drug testing lab that the Kentucky Horse Racing Commission is contemplating. We've also proposed that Coldstream would be an excellent site for that testing lab. So with that highlight, I'd like to turn over the rest of my time to Dr. Lori Garkovich. During the LFUCG equine task force study, Dr. Garkovich helped us think of ourselves as an equine business cluster. We certainly are that and hope to continue to realize ways to increase our community's recognition of the importance of the equine industry to the economy in Lexington. So I'd like to ask Dr. Garkovich to talk. Thank you. Thank you, Dr. Cox. Welcome, Dr. Garkovich. Thank you very much. I'm handing out just a little brief kind of summary of what an economic cluster is, and I refer you to page 28 of the packet that you have, which illustrates one of the examples of how you can kind of think about how the different components of the industry, not just the ones we automatically think of in terms of the horse farms, the racetracks, the Kentucky Horse Park, and perhaps barn builders and people who raise and sell hay and feed, but how many other businesses live on and succeed because of the viability of the economic cluster that we have here around the horse. Economic clusters develop in areas where there are competitive advantages that attract similar economic firms. So you just heard about many farms moving to this area because of the attractions that are already here, as well as stimulate the development through attraction and creation of new or related firms. I don't think there are many places in the United States where you can go down the road and find signs that say equine dentistry or equine podiatry. I also don't think you can here in this region. There are many places in this community of businesses where their primary business is related to food, floral, florists, greenhouses, where they can tell you exactly when there are major shows at the Kentucky Horse Park or major horse-relented events going on because of the uptick in their business. We know of people, there are not other places in the country where you can go past dry cleaners and see a sign that says, we do horse blankets, because they can afford to buy and dedicate a cleaning machine just to horse blankets because they have a sufficient amount of people who come in there and use that service. So the model, kind of like on page 28 and that you see here on page 2, kind of illustrates for you the fact that there are just an enormous number of businesses that thrive because of the equine cluster that is here. from professional services related to insurance, sales, marketing, advertising, et cetera. So I just want us to understand that when you think about an economic cluster, this model is just a way of kind of seeing how the pieces of the diverse economy that we have in this region fit together and are integrated into and profit from the viability of the equine cluster. Clusters, if you review the literature, what you realize is that many other nations and other parts of the United States have recognized that clusters have an advantage because they stimulate entrepreneurial development as persons who are already involved in the business identify gaps, which mean opportunities for new businesses, or they see opportunities where something that nobody else is doing where they can build new businesses. Clusters also stimulate economic development by attracting other people to this community, and we've just heard several discussions about businesses moving to this community because of what they already have here. Whether it's the small farmer, the small person who owns one or two recreational horses, or you're buying 150 acres and putting in barns and you have $50 million of horse flesh standing inside that barn, no matter what level you're at in this region, you have access to the same and excellent animal health services that are available through our veterinarians, and it doesn't matter how big or how small you are, we all have access to it. And that is something that attracts people to an area where you have a clustering of related firms. Characteristics of successful clusters in other places include things such as these communities encourage and facilitate new business development, and they do this with incentives and by, for example, establishing incubators, where people who have new ideas about perhaps a new software program that can assist farm managers in scheduling their breeding process can come and develop their business ideas. Secondly, successful clusters have networks and collaborative ties with local schools and universities, as you've just heard described here, and those are designed to do two things, to stimulate workforce development as well as to provide a mechanism for research and development of new ideas. Successful clusters also establish partnerships with local and state governments to nurture the viability of the cluster, and they do this by supporting continued growth and ensuring that the local ordinances and state laws do not inhibit the potential growth of the cluster or impose unreasonable restrictions on the cluster. And finally, successful communities that have successful economic clusters foster local awareness of the cluster and nurture communication and interaction within it. In other words, my concluding comment is this. If you do a study of economic clusters around the world, what you also realize is that not only are there places that are building their economic future around this model, but there are places who have let their clusters die. Clusters do emerge in places that have competitive advantages, and there's no question that our land area here provides a foundation for the success of our equine industry. But we also know that even in other places, clusters can fade away or simply just die away. And that happens for one of three reasons. People assume that it's been there in the past, and so will always be there, so we don't have to worry about it. But let me tell you that we can look at our economic cluster and we can take the example of the standard bread industry and we might begin to realize that if we don't take care, other states can offer competitive advantages. Secondly, clusters die because they impose restrictions on the growth of the cluster that reduce their competitive edge. And third, they die because the people in the communities where the clusters are located and local governments and state governments fail to implement policies and programs that support the competitiveness of the cluster. I think the report of the committee to you includes some very good recommendations about how do we avoid this. But if you have one takeaway message, it's this. This is a model for thinking about how everything is put together, and it's also a reminder that just because it's always been here doesn't mean it will always be here. You have to nurture clusters, and some of the key writers in this, economic writers in this area will tell you the same thing, that if you don't care for them, they will slip away. Thank you. Thank you, Dr. Gorkovich. Are there questions for her? We appreciate it very much, and we have to learn how to do that nurturing. And what we want to learn today, one of the things. Dr. I mean Mr. Gaines would have said that if you're going to have a factory it's important to have a factory floor and the factory floor is the land that we have here in central Kentucky and Billy Van Pelt is going to lead us through the importance of that land and how we need to nurture it and preserve it and make sure it's there Mr. Van Pelt is director of the program for purchase of development rights here in Fayette County. And he will bring you up to date on the status of that today. He's accompanied by Margaret Graves and Tom Thornberry, who are also, I think, on the board this time. And maybe some others. I'm going to take up the first bit of time for the presentation. Then I'm going to turn the mic over to Tom Thornberry, who's on the PDR board. and works for Keeneland. The information packet that I've passed out to you has a Sky Magazine insert with it. You'll note that on the inside of the front cover, the farm with the white fence is highlighted, and that farm is in the PDR program. 22 of the 64 pages of that insert are dedicated to the horse industry and to agriculture and the rural landscape. And I think it's very important to note that a third of that insert is dedicated to our rural farmland. I've also included the highlights that Dr. Stevens asked me to come forward with today, a list of our board members as well as a map of the farms in the program right now. I'll be giving a full update to the council as part of our annual update process on December 2nd, and I'll have a broader presentation for you at that time. If you can refer to the update with the funding at the top, You'll see that for FY09, we received $2,466,081 in federal matching grants, and we matched that with local bond funds. To date, we've received $29,435,980 in matching grants, and the local investment has been $24,072,719. So LFUCG has received $5,363,261 more dollars in matching grants than it has invested. The annual operating budget for the program has actually been decreased from FY08 by 8.9 percent. Our operating budget, which includes the debt service on our 20-year municipal bonds, is $1,128,060. And our debt service on our 20-year bonds is $933,640. The operating budget for the PDR program averages out to $4.04 per citizen per year based on the 2007 population. So it's a very inexpensive program for retaining the ag, equine, and tourism industries here. That is our brand identity, and I think that that's demonstrated by the fact that you have it highlighted in Sky Magazine that I passed out. It's a continuous application process. We've already received applications for round eight. In round seven, we had 64 applications on 4,849 acres with a need of $12.2 million. The current need for the remaining applications is $6.7 million. We're at 22,444 acres. That's 44% of the goal in eight years. We plan to be at 22,800 acres by the end of 2008 and to be halfway to the goal at 25,000 acres by the year 2010. And to be at the goal by 2020, and believe it or not, that's in just 12 years. The ordinance goal is 50,000 acres out of 128,000 acres in the rural service area, but the actual remaining farmland in the rural service area is approximately 113,000 acres. This would leave 63,000 acres remaining for potential expansion of the urban services boundary. 50,000 acres is only 27% of the land in Fayette County. A breakdown of the farms in the program, 194 total, 100 equine farms, 81 general ag, and 13 classified as other. I think it's important to note here that just because a farm is a horse farm today doesn't mean it can't be a general ag farm in the future or vice versa. The important thing here is that we are protecting the land. We've received 33 donated conservation easements on 1,610 acres, resulting in a savings of $4,025,000 to the LFUCG and Conservation Easement Acquisition Funds. The average size of a farm in the PDR program is 115 acres, and the average cost of a conservation easement is $2,500 an acre. By the end of 2009, our goal is to reach 24,400 acres, and by the end of 2010 to reach 26,000 acres, and by the end of calendar year 2020 to reach 50,000 acres. Are there any questions? Before I turn it over to Mr. Thornberry. Thank you. I think that we were certainly the progenitor of this idea in central Kentucky, but I understand several other counties have taken that up. Is that right? That's correct. I've worked along with some of the folks in the room here with Woodford County, Scott County, and some others to develop their own version of our PDR program. Scott County has adopted their own PDR ordinance, and they've appointed their board, and they funded it with a million dollars to start with. And Woodford County is working on a draft version of their PDR ordinance, and they've appointed some members of their Rural Land Management Board as well. I think that other counties in central Kentucky will have their own farmland preservation programs, but I think they'll be different because the counties have different zoning. And the counties have different soils. I think we have very good soils here in Fayette County and very good soils in Woodford. Clark County, we've talked to them about a program in Bourbon. And, you know, programs may happen in some way or another. The Bluegrass Conservancy is a private land trust that takes donated conservation easements in Fayette and the contiguous counties, and that's an option for those individuals wanting to donate a conservation easement as well. Okay. Thank you, Billy. You're welcome. Any questions? Jay McCord. Thank you, Billy, for all that you do. And, you know, this is one of those things where a lot of folks don't think it all the way through, and they look at this program and have a lot of misconceptions. But heading into, obviously, some very difficult economic times, I mean, just being very, very frank in the next year's budget and looking at this program, what do we do, what can we do maybe is a better way of phrasing this, to really ratchet up the opportunity for donated farms in case we are in a situation where, let's say, that we don't have money to do the program or to pay or we have less money than we've had in the past. Do you have a strategy that takes into account maybe moving our focus towards donation over the course of maybe some of these more difficult times, or have you thought about that? Well, speaking very frankly, I don't think going that route is, unless we absolutely have to, is an option. I think now we should build on our success of the last eight years. The program will reach our goal in 12 years. We're protecting three of the largest industries in Fayette County for less than half of 1% of the entire LFUCG budget. So I think it's a very small investment to retain those industries here because those industries can go to adjoining counties very easily. So I think we need to keep them here. The fact that we're using bonded money I think is also important to highlight. We've only used just over $5 million in cash at the very beginning of the program. We're using bonded money. And probably the most important point is, speaking of bonded money, we know that we're going to be bonding a lot of projects in Fayette County over the next 20 to 30 years for various infrastructure needs. Communities that have a very strong vision for who they are, that have strong planning, that have programs like this, have very high credit ratings with bonding agencies. Communities that don't have a strong vision for who they are and that don't have an end game for what their community is going to be have very bad credit ratings with bonding agencies. So it's in our best interest not only to retain the ag, horse, and tourism industries, but to also retain a good credit rating with the bonding agencies. Sure, and I know that there are numerous factors that come into play with that bond rating. And as I say, what I like is that in the work that I've done with college students in the central Kentucky area, what most folks don't quite realize is that this is on the mind of a lot of people. They don't call it PDR. But overwhelmingly, students when surveyed and asked, what does Lexington have to have for you to want to come back 10 years after graduation if you were to move away? They keep coming back to horse farms and to farms in general. And so I think that by doing things of this nature that we need to, I certainly encourage it. I'm certainly behind it. I just want to point out that in the times that we're living in, that we may have to do it a lot more creatively than we've done it in the past. We may have to look for a lot more creative saws and being good stewards with what we've been given. And, you know, anything that the PDR program can do now to be thinking along those lines, that here's another way we can still accomplish this and still get to our goal, I would be very interested in. So, again, I appreciate all that you all do and recognize how important it is to, I guess, preserve our signature and our brand. Whether people like it or not, it is our brand. And that's what I find very fascinating is that communities all across the country will spend billions of dollars trying to come up with a brand, and we already have one. We like to run from it. But this is something that is an important piece of it, but we certainly are going to have to be very creative as we move forward as things get constricted and pressure gets put on to maybe not see that bigger vision. So I appreciate the time. Thank you, Doctor. Thank you, Mr. McCord. Council Member Linda Gordon would ask you a question. Thank you. I almost said Mayor. Dr. Stevens. No, Mayor. Thank you very much, Billy. I had a couple questions on the PDR update that was passed out to date in round seven. 22,444 acres in 44% of the goal in eight years. Let's see, that's about 2,800 acres per year average. When we first passed this in 2000, do you remember, was there a yearly goal set out? I don't remember one. I remember the 50,000 acres at the end. There's not an annual goal. I just think we've had an average, and it's obvious that we have more than enough applications. Right. It's just a matter of funding, and we're very pleased that the program has been funded every year of its operation, and we're very grateful for that. Well, that was going to be my question. Is there anything other than funding that slows the process? I mean, I think you've got it pretty finely tuned now, don't you? Well, as you can see here, we're going to have 48 applications remaining in this round, and then we'll probably get another 25 to 30 new applications in the next round, and that's what we get consistently. So all the new applications will be ranked with the applications that are being carried forward. So we have the demand, but we understand the funding matters. That's why we reduced our budget by 9% in this fiscal year to help out everyone else. Are these federal dollars, are the state dollars a one-for-one match, and are the federal two-for-one, or does that vary? The way that works is that we can match a federal dollar and a state dollar to one local dollar. And I'm glad you raised the federal dollar subject. When we apply for these federal grants, it's purely based on soil quality. They want to know how many acres we have of prime farmland soils and how many acres we have of soils of statewide importance. Because they're looking at this from a national security standpoint. This is a nationwide program. to put the best farmland under permanent conservation easement for our nation's food supply. So you really, we should take a long-term view on this and look beyond the current industry's 50 or 100 years into the future and to see the object here is to preserve the farmland because we could be using it to grow food or alternative fuel sources on 100 years from now. So is there homeland security money for that? I don't know. This is part of the Farm Bill. That's very interesting. I didn't realize they looked at it in terms of a future need in a crisis, I would presume. Our application is what they're concerned with, two numbers, and it's the number of acres in prime farmland soils and the number of acres of soils of statewide importance, And that's what our allocation is based on. Okay. And so for a community which has soils which aren't particularly valuable in that regard, they would go down the list for matching dollars. Probably. We've consistently gotten the entire allocation for Kentucky. In federal money. In federal money. And while Scott County has started their program and they have a million dollars, it's unlikely that the first year of their award would be over $100,000 or $150,000 because they're going to have to prove themselves as a viable program. We started out with $150,000. I was going to say we started out small and have gradually built up. And did you say that out of the 128,000 acres in the rural service area, 113,000? Roughly, because we have to back out Keeneland, Faisy-Tipton, the airport, Main Chance, Spindletop, I mean the horse park, those things that are not available for the program. Okay, so the 113,000 acres was a potential acreage that's not developed. That's farmland right now. That's farmland. Correct. And you've taken all those entities out. Okay. Okay. Well, I would, just to comment, I would dare say we don't have any other program in government that's leveraged so much state and federal money. That's right. I mean, for match. And I think that's the key. Anytime we can double our investment at the beginning of the process, I think it's very important that we do that. Thank you. Thank you. Council Member James. Thank you, Dr. Stevens. Actually, just something that Linda said I think is a really good idea is if protecting the land is a homeland security issue, there are homeland security dollars. We've heard that there are a lot of those. I know that our public safety division uses that a lot. Is that something that you could look into for us and see if that's a possibility? I will look into it. And also sustainable or organic farming, that sort of thing, and looking at it for that particular purpose, that might be a way to get monies into the program. Thank you. Thank you. I know that Billy will leave no stone unturned, even if it's in Marlone. And Mr. Thornberry would like to come to the mic at this time. Please, Mr. Thomas Thornberry, who's been involved with the horse equine business all his life. I know because he helped us do a case over at Sunnyside Farm one day. Tom? Thank you, Dr. Stephenson. Thank you all very much. I'll speak briefly. I suppose when you look at central Kentucky, if Kentucky were the garden, central Kentucky would be the asparagus patch of the garden. And I think when the first settlers arrived here, this was sacred hunting ground for the Indians. In fact, the tribes that hunted here did not even live here. They came, they hunted, and they left. They kept it as it was. That was no accident. It's due primarily to the prime soils, the excellent water, the perfect conditions that accommodate wildlife here in Kentucky. Later, as horses and livestock were introduced and thoroughbred breeding evolved, this became the epicenter of the thoroughbred breeding world. It remains so today. The foremost farms are here. The world's finest stallions are here. The population of the best broodmares are here. The world's finest veterinary facilities are here. We have research facilities at the University of Kentucky that are beyond anything in the world. All for the same reasons. The prime soils, excellent water, the perfect conditions to accommodate livestock. stock. Our farms and cherished way of life here in Central Kentucky are under threat. I think you can understand the threat of development, and we in the thoroughbred industry understand vividly the threat from competition from other states that have alternative sources of income, alternative gaming that allows those industries to compete with us directly for our stallion population, for our broodmare population, for the breeding industry that that makes this particular state so perfect. Briefly, through the efforts such as PDR program and conservation easements, thousands of acres have been protected. Simply put, Fayette County must make it a priority to protect all remaining prime soils, either through property development rights or other land use programs. The economic viability of our business depends on it. That was my statement, and I thank you very much. Well, that was well said in a brief time. Tom, are there any questions for Mr. Thornberry? Yes. Mr. Lane and Ms. Gordon has another comment also. I just wanted to sort of comment on the PDR program. As the 12th District Council member, it covers most of the PDR investments, if not all, are in the 12th District. And I've been on the council for four years now, and so when I first got on, I really looked at PDR very carefully. And I just wanted to compliment the program. I think it's one of our best managed departments we have in the government. I think it's board as a group and Mr. Van Pelt as the executive director have done a great job over there. And another recent development is how well the board has reduced the cost of the bureaucracy of running the PDR program through Mr. Van Pelt's initiative. and we're able, therefore, to put really more dollars into acquiring PDR rights. So I just want to compliment you all. I think you all have done a very good job, and thank you for all your efforts on behalf of the PDR program. Thank you. Thank you, Mr. Lane. Ms. Gordon. Thank you, Dr. Stevens. I thought of two other things I wanted to ask you. You talked about the applications that are in process or your predictions for the next years in the future. How do you – does the word just get out, or do you have an official mailing that you do? We do. In fact, that will go out December 29th for the deadline that's January 30th. Our deadline is the last business day of January every year, and we hold two public meetings. The public meeting this year will be on January 15th, one meeting at 1 o'clock and one meeting at 7 o'clock. Those are advertised in the Herald-Leader and they're held at the county extension office. And I'm there and members of the PDR board are there to answer questions. We have all of our GIS maps up and we help farm owners fill out their applications. So what we do, we get a mailing together of everyone that's in the rural area that has at least 20 acres that's not in the PDR program already. We send that out every year. And we also do GTV3 updates, one every quarter, to update the public on how the program is going and make them aware of that deadline in that way as well. Okay. And then back when we passed this, the PDR program and the enabling ordinances, One of the things I know we had a lot of conversation on was that the thought was that the farm owners would receive the money, and for many of them the money would go back into the farm, developing lands for farming or fencing or buildings. Do you get feedback on how the monies are used? We do. We do an anonymous survey every year, and I can give you the 2007 survey results, and I can distribute those to each and every one of you. That would be good for us to see how farmers are using the land. 60% of the farmers put it back into the land, either through new water lines, new fencing, new ag buildings. They're paying down debt. They're buying more farm equipment. They're buying more livestock. They're buying more land. So it is going back into the local economy. So that's working. It is working. That part of it. Good. Thank you. You're welcome. Thank you, Mr. Van Pelt. The Dr. Mr. David Lord, who's the Convention and Service Visitors Bureau, was called away to Frankfort. I'm pleased though that two of our Fayette County delegation are here, Mr. Bill Farmer and Ms. Kathy Stein, to hear these ideas and understand what some of our problems are. I know they know more about it perhaps than we do, but if you'd put up that first picture, Chris. Mr. Lord's visit with the equine task force several occasions. And thank you. And his remarks and contribution to the report start on page 22. So you may want to take a look at that. This is a. It's called a blue horse. and I know that the Lexington Convention Business Bureau is developing an image for us to be here in Lexington, which will be called the Blue Horse. This is not exactly what they have in mind. Their actual picture, they've taken a picture of Lexington, the first or the most famous stallion to start off here in Fayette County, in Woodford County. I guess, was he in Fayette or Woodford? I can't remember. but a Lexington portrait was allowed to be used to depict a thoroughbred horse, and that horse will be called Blue Lex, and we'll be adorning all of our lapels and our other apparel here not too far in the distant future. Thank you, Chris. Our next presentation will be by Dr. Allison Davis. who is from the University of Kentucky College of Agriculture also, and will tell us about how important in terms of dollars the impact of this cluster and businesses are in Lexington. Thank you. Dr. Davis. Thank you. Unfortunately, because of the way data are collected by the federal government, many of you may have seen these numbers in the past, and they can only be updated every five years or so. So the 2007 numbers, while it is now almost the end of 2008, will not be available until next year. So we have to just sort of make expectations about how things are changing over time. The goal of today is to talk a little bit about Kentucky overall, Kentucky Ag overall, Fayette County overall, and Fayette County equine industry. And just to give a couple of generalizations at the end about where we might be going, This is the wonder of the new Microsoft Office system where you can't read anything, but it's very fancy. The one thing you can tell, and of course this is of no surprise, that horses remain to be a very big market for Kentucky. Tobacco, of course, is going a little bit by the wayside for some of our smaller farms. And right now, with our economy changing, some of the new crops, horticulture, and some of these new exciting new crop opportunities are gaining some mainstay. So just to show you that from 2002 to 2007, Kentucky cash receipts have risen by over about a billion dollars. One thing we can tell is the change between our livestock industry and our crops industry. Our crop industry remains relatively stable. Our livestock industry has continued to increase, and that is mostly due to our horse industry in addition to our cattle industry. Kentucky has about six traditional ag commodities that account for about 85% of our cash receipts. And this is for 2005. And by 2008 or so, these numbers, particularly the ones that you'll see at the bottom, not necessarily catfish, but our fruits and vegetables and greenhouses and so forth, are expected to increase. But we still expect to really remain with these six traditional ag commodities. So horses leads the way, poultry, cattle, tobacco, and that number will continue to fall as we go on. Corn and soybeans, and those numbers will continue to change as we see fluctuations in our ethanol industry and where that might be going in the future. I particularly like this map. It just shows trends in our cash receipts between 2005 and 1998. And you can see most of Kentucky has lost cash receipts over time at a pretty substantial rate. But Fayette County and two of our contiguous counties have fared a little bit better. And that's almost 100% primarily due to the equine industry. Net farm income. In Kentucky, we had about $847 million in income. that averaged about $10,000 per farm. That's for the whole state. If we look at Fayette County, we had about one-tenth, so we account for just about one-tenth of the total farm income in the state, but our average net farm income is about $100,000. So that's very, very different from the state averages, and we can again assume that this is largely due to the equine industry for sure. Most of these numbers have been seen before. Some of our equine numbers are not freely available as time goes on, and it fluctuates year by year depending on disclosure issues. But in 2002, we had 426 horse farms, 206 thoroughbred farms, about 12,600 horses, and that, of course, put us number one in the state. In Kentucky overall, our horse farms were increasing, and the number of horses we had also increased between 1997 and 2002. So this is, I'm not going to spend much time on this, but this, and I think everyone probably has seen this in the past, but this just gives some average and estimated revenues and expenses for Fayette County farms, and it differentiates between an ag farm that's not necessarily specific to a commodity versus a farm that's dedicated to horses. And we can see that, for the most part, the horse farms tend to do a little bit better, but they also have higher expenses associated with them. Employment in the ag sector, this is important. This answers our question about, you know, how important is the equine industry in terms of employment. On average, a horse farm has about 6.72 employees versus a traditional farm, which is 1.67. So we're employing a few more people. And overall, there seems to be a pretty big difference on the state level. This is for Fayette County. and Fayette counting for 2002, and I'm anxious to see 2007 numbers, the equine industry, which includes mules, accounted for 89% of the ag industry. So that's a very, very big slice of the pie. And the other cattle and calves also accounted for about 4%, but tobacco was 4%. I'm not sure how much those numbers will change in the future. But this is an increase of 15% from 1992. The value of products marketed from farms, those big white bars, this is for Fayette County, those are equine. That's a value for the equine markets. And the blue is cattle and calves, that teal color tobacco, and then green is other crops. And again, these other crops are going to continue to grow because of the popularity of the horticulture and new crop areas. Just a brief overview of what used to be some of our other mainstay industries, tobacco. We were number 14th in Kentucky. I don't know how many farms are no longer participating in tobacco production, and what type of tobacco they're producing has changed depending on location. They're going more into the dark, early tobacco. Cattle and calves. This is an interesting market that can't be captured by 2002 data. Our cattle producers are not doing particularly well. This is one of the worst years in a long time, mostly due to feed costs because of our corn industry and because of fuel costs. So we don't have as many head of cattle that we used to. We're selling them in a much quicker time and a lower weight. And of course one of our our sticky issues is the Bluecrest stockyard location. We want to try to keep that local because it keeps our markets local. And this is just, these don't show up very well at all at the color, but just an overview of our cattle and calf inventory which is our second most popular ag commodity in the county. Greenhouse nursery inside, Dr. Woods is He's our ag extension specialist for this commodity, and it's doing very well. We give out an annual update of the agriculture in Kentucky, and this is the only market right now that has been successful in the last year or so. And it's because of our strong demand due to population, regional marketing center, transportation hubs. Our farmers markets have grown across the state. They're becoming very popular. of a lot more people participating in the farmer's markets, and the value associated with them has grown tremendously. This is the economic impact of the equine industry. The numbers at the top are our direct values. I do input-output analysis, and we calculate multipliers, and I'm sure everyone's very familiar with the multiplier. It essentially says how many times the dollar turns over in our local economy. We had, for the state of Kentucky, this is production only. This does not include any of our side businesses. It doesn't include feed. It doesn't include boarding. It doesn't include veterinarians. This is just the farm side. We had about $1.01 billion in revenue, approximately 45,000 employees, and about $130 million in value added. As an economist, I'm very, very interested in our value added, not as much as our revenue. value added is additional wealth that goes into somebody's pocket. And this is the number that we should be very much concerned with. This is the growth in an industry. And the multipliers, the one that stands out, and I don't like to typically talk about very large multipliers because I don't give them a lot of credence, but because I did this, I feel much better about it. But the multiplier is just under four. And this is a very, that's a large number, but it's believable. That says for every dollar of wealth created in the horse industry, there's an additional $4 created in related industries that they do business with or households that purchase and do business with the equine industry. So our total impact in Kentucky is about $1.78 billion in revenue, about 53,000 employees, and just about half a billion dollars in wealth. In Fayette County, and these numbers, they range from different areas, But I've picked $308 million. We have about 5,000 employees and about $38 million in value added. And the multiplier in Fayette County is a little bit smaller, but it's still pretty sizable. And from that, you can see our total impacts below that. What I'd like to do is to show how those multipliers range across different types of sectors in the county that one might think would have a higher bang for your buck. And this is for, I believe this is for Fayette County, but you can see the income multiplier for agriculture in Fayette County is the highest among mining, manufacturing, education, and services. So that means that our dollar is transferring more when we look at agriculture versus other industries. This is not the same in other counties. This is not something you can mimic from county to county. Fayette County has a special circumstance that a lot of other counties would not have, particularly eastern Kentucky. You're going to have mining and education and health multipliers that are going to be much larger. But Fayette County, that's impressive to me. This is very small to read, and this was presented last time. This was a survey that was done that asked about specific policies or interests that horse farms versus traditional farms would be interested in. And at the top for horse farms was boarding, finding boarding broad mares, and there was boarding issues, direct marketing, and so forth. So it was a nice idea of what the actual farmers and horse owners were thinking would be useful for them. This has all been said so far. What are the strengths for Fayette County? Everything's been said. Some of the weaknesses, the high-priced agricultural land. There is definitely a benefit to having a PDR program, but what that does is it does put upper pressure on the remaining ag land that's out there. Our loss of tobacco program. We do have urban sprawl, but that's being reduced a little bit because of the PDR program. And we have, of course, everyone knows the tax issues and what is conceived to be unfavorable tax treatment, both in sales tax and income taxes. And what are the recommendations? The first recommendation is to fully understand the different equine markets and the impact on the area. We talk a lot about the thoroughbred industry, but a little bit less about specifics to Kentucky in terms of the impact of our other horse industries. So the non-racing industry, the show industry. In our department, Dr. Jill Stowe, she's a new equine economist. I think there's maybe two in the country, so we're real excited to have her. She just sent out a survey to show managers and then competitors to try to understand the value associated with having both large shows and small shows and what kind of money that brings to a small community. And then the rest of the recommendations are self-explanatory. Any questions? Are there questions for Dr. Davis? Mr. McCord. It's not so much a question, but it's something you brought out that I want to bring light to, that over and over and over we've heard that one of the most unfair things about Kentucky is that we have equines not treated as livestock, and it puts us at a distinct disadvantage. And I was talking to Senator-elect Stein, and I haven't had a chance to talk to you, Representative Farmer, But I'm sure that this is something that we can work on, we can affect. It keeps coming up, so that means that we're not really doing a good job of getting at it. So what I'd like to do, Bob, I know you are in the room, and Chad, I'd like to go ahead and put together a group from Commerce Lexington, from our elected body in Frankfurt, from this body, from U.K., and let's sit down and figure out what it is we need to have in our hands, put in their hands to take to the legislature, because we don't have a compelling case right now. I mean, we don't have overwhelming numbers that really would cause a legislator to go, okay, I get that. I'm going to do that. And I think that at the end of the day, what we need to do, if we're really serious about this, this is something that is low fruit that we can do, and we can do to support the industry, is let's go ahead and put together a strategy meeting before the session starts, or at least heading into the biennium session or whatever. But this is something that I was glad it showed up in your report because here is a way that we can send a message that we are serious about supporting this industry. But, again, legislators need the supporting documentation that's overwhelming, that makes it very easy. And what's the win-win? If we lose that tax revenue, how are we going to see it back? Those types of things. And I don't know if we have the compelling evidence that all of us can talk about very intelligently yet. So, Bob, if that's okay with you guys, I'd like for you all to facilitate that meeting sometime in the next four weeks, and let's move forward on this aggressively. I know in our department, particularly since Dr. Stowe got there, we have talked a lot about what would be some of the ramifications from removing a tax or reducing it, and we talked a lot about buying local, enhancing the clusters so that if you now have extra money available, A, you'll be able to spend it locally and help out your local markets. The prices of horses are expected to go up right now. The prices of horses have gone down because of this tax, and a lot of our revenue is heading out of the state. So I think we've already started thinking about how it is analytically you would approach, and of course numbers talk more than feelings, I guess. So we have started talking about how that might be done. Well, and not only from an analytical standpoint, but from a very emotional standpoint, This is something that's really critical. I see that if we're going to recruit the best into the state, we've got to lay the infrastructure in that's acceptable to them. And this is a real hindrance. I mean, I keep hearing it over and over and over and over. And so if we can remove that, but recognizing, again, you're talking about an entity in the state that's having declining revenues, and so where are they going to get? Now we're going to take away more. Maybe this isn't the time. You have to give compelling evidence, and you have to show where they can make that up in other ways. And one of those things would be, for those that are certainly in the audience and a part of the industry, is to start making a list of the areas where you would go if this was removed tomorrow. Where would you go to start bringing folks in, and what kind of overwhelming evidence do you have that these people would come if that would be the case? I mean, at the end of the day, it needs to be overwhelming. It doesn't need to be one paragraph is what I'm telling you. And it needs to be done in such a way that any member of this council, whether they serve in an urban area or a suburban area or in the farmland, can talk about it intelligently. And I don't mind sponsoring a resolution that would push this forward from our end saying we support this. And, again, I think that our Lexington delegation certainly has our ear and your ear as well. So let's do something. This is something we can do. So I would move, Bob, that we do that soon. Thank you for your question. In the form of a comment. We are going to take up what you were talking about the next thing on the docket here. Are there questions for Dr. Davis? Mrs. James has a question for you. Thank you, Dr. Stevens. I think this may be for you, or you can add, or you can respond, or whomever. I think as one of the urban council representatives, I have an interest in the rural areas, the PDR program, the rural settlements, and especially with their affiliation towards the horse industry. But it's difficult to get urbanites or people that are within this area. I could go weeks and talk to people that have no interest in horses at all or the econ industry because they don't have an affiliation with it as far as they know. So I would encourage, going back to the feelings and the public sentiment kind of feel to gain support, that we really tap into where in the urban areas are there attachments and affiliations to the horse industry, because there are some. It started somewhere. There's root. When we talk about Big Lex being around, Big Lex was actually at what is now the Castlewood Park and roamed around that area on a farm. I think if there could be some public education, something that shows that we're all connected, that we are all part of the horse capital of the world, because there's a huge section of our population that doesn't feel connected to the horse industry at all. So I'd encourage and charge anyone that has any involvement in this at all, try to help me to be able to be an urban council representative and talk to folks about why supporting the equine industry is important. And I guess that's about it. And really show those connections. So as I look at a bio about what is Big Lex, how did we choose Big Lex, let's really get real down and deep and talk about the history of Big Lex, the trainers, the history of those, the stallions and the mares. And I don't even know what all of it means, but I just know that there's a root. And a lot of it has to do with, you know, the African-Americans that worked with the original horses and trained those horses. And then everything bred after that is tied to that lineage. I think we need to get to the point when you look through something like this, that you see some people that look like you. and that it's representative of Lexington so that everybody can be proud to honor and to serve the equine industry and invest. So I just put that out there and welcome any responses and willing to work together with folks on that. Thank you. Thank you for your suggestions also. So, Dr. Davis, we're very grateful to you for bringing us these facts, because I think you're right that facts should determine public policy and not just what our emotional points of view might be. Pardon? I didn't hear you. Oh, I was just saying, unfortunately, sometimes numbers shouldn't be the compelling evidence, but unfortunately, when it comes time to money, they typically are. Well, for our Budget and Finance Committee, it is important. Yeah, no, I understand that. And that's what we're talking about partly here today. Are there any other questions for Dr. Davis? Thank you. If you'd put up the second sheet, Chris, that it says priorities. The equine task force has developed some priorities that relate to the gist of what we've been talking about. And I'd like to run through those just briefly. And I don't think we'll be able to apartheid these things into specific resolutions today. but I would propose after we reviewed these that we be prepared to bring to the council sometime before the year is over some specific resolutions that relate to what we can do as a local government to improve the arts business. Well, that doesn't show up too well, does it? Can you see that on the screen behind me? And what this says is that, of course, the first thing that this task force was interested in was further economic development of the equine industry. And one of the things that we thought that might be helpful was to designate a part of the team of economic development, someone who would be primarily concerned with the equine industry. just like our football team has a coaching staff that some work on wide receivers, some work on backs, and others work on different things. We need to kick this off. We need to have a person who will be working on this area, not to splinter up the economic development, be part of that team that works on it. A second effort would be working on the equine cluster model that Dr. Gorkovich spoke about and what we can do to make sure that it's nurtured and continued. They do bring new jobs and new interest to our region, and it's important. As far as public policy is concerned, what can happen in the legislature, as Mr. McCord said, is very important. And we need, as a central Kentucky group, including UK and the urban county government and the Commerce Lexington, to develop a coherent public policy position regarding this. And I know that that has already been undertaken, Mr. McCord, so it's not a new initiative. The sales tax inequities, we've talked about it about every meeting of the task force, I think. And that's something that we cannot do here in Fayette County, but can be done in the county over on the Kentucky River that's in Franklin. UK is now developing this equine initiative, and I think they're trying to raise, I think, about $20 million. Is that right, Dr. Cox? Something like that? And that needs to be pursued. and as Mrs. James pointed out we have a big job to do with imaging and marketing such as Big Lex and talking about the things in Kentucky. You might be interested in the District 1 that she's talking about. We now have an Isaac Murphy Park but also Race Street runs right through the middle of District 1. So at least from a historical point of view there were a lot of thundering hoofs there at one time. So tourism is a big thing. It contributes a lot of money to our local economy. That's part of the cluster. And we can improve on that. I'm sorry that Mr. Lord couldn't be here today because he's got his finger on those actions. Mr. Bob Quick was one of the two co-chairs of this task force. He shared it with Mr. Frank Penn, who's recovering from some orthopedic surgery, which I know doesn't take very long. But it can be not a very pleasant experience, and we wish him well. Mr. Quick, did you have anything you wanted to add to our deliberations today? Just very briefly, I just want to say to the council, thank you. This is one of those areas where I think a partnership is indeed the answer and how you all have come forward. And Dr. Stevens, I just want to thank you for staying vigilant on this issue and holding a lot of feet to the fire, public and private sector. But just the openness and the way the council has supported this, but your efforts on our task force as well as, Ed, how you brought incredible information to this whole process. I think we are at a point in our history where 25 years from now people are going to look back and say they did the right thing or they didn't do the right thing, and that is by doing nothing at all, I think we can lose this industry. So we have everything in front of us, everything going for us, and I think taking this on, our group was just to come with recommendations, but creating an effort to go forward I think would be outstanding, and I think the time is now. Thank you very much. I sort of feel the hot breath of John Gaines on the back of my neck because I promised him that we would put this on the docket sometime in the council and carry it through. And I would propose that we be prepared when we convene again on December 9th for this committee to make some definitive things regarding these issues. And that would include some prospective resolutions and other things that we can do here locally. Is there any other, anybody else would like to speak? Oh, thank you. Council Member Gorton. I have just a couple comments, Dr. Stevens, that if you would tuck them under your hat or your somewhere when you're preparing for this next meeting. A couple things came to mind. Big Lex. I know that the Convention and Visitors Bureau is moving forward with that as a branding, and I think that there's a lot that we could do within our community to similarly brand. And some of the things that I was thinking about are big lex on our wayfinding signs, not huge and, you know, obtrusive, but just right there at the top. Big Lex on some of our bus shelters. And we could incorporate Big Lex in some of the city things that we do so that Big Lex would become an all-around branding. Because I agree with you, there are a lot of things we could do in the community to use that branding here in our own city. And then the other comment I had was about the PDR program. I would hope that perhaps one of our recommendations on the 9th or coming out of that meeting would be to evaluate our potential for future years for the Purchase of Development Rights Program and to look at our goals and just see where we think we are with that as a community. and I, of course, would ask for a lot of input from Billy Van Pelt, but to see if, in fact, your initial comment about the factory foundation, if we need to have some sort of impetus to let us look at the acreage and the goals and the potential stakeholders and who's involved with that and whether that needs some sort of nine-year outlook from when we started the program. So those are just a couple things I wanted to put in the mix. Thank you very much. Those are good suggestions. Is there anybody in the audience who would like to add anything to what we've discussed today? If not, I would like to thank all those who participated. I think it's been a good review of the information that's available, plus some new. And for those of you who may have tuned in late, you can get it off the UK website, I mean the LFUCG website, and replay this meeting if you so choose. Thank you very much for coming.